LNG Canada project is a major liquefied natural gas (LNG) export project being developed in Kitimat, British Columbia, Canada. Comprising two LNG trains in the first phase, the LNG Canada terminal will have the capacity to export 14 million tonnes a year (Mtpa) of LNG over its estimated project life of up to 40 years. It is estimated to cost C$40bn ($31.2bn), making it the biggest energy investment in Canada.
In October 2018, Shell along with four joint venture participants Shell (40%), PETRONAS (25%), PetroChina (15%), Mitsubishi Corporation (15%) and KOGAS (5%), took a final investment decision to develop LNG Canada, a major liquified natural gas processing facility located in Kitimat, British Columbia. LNG Canada will initially consist of two trains, or processing units, that will receive and process natural gas, converting it into LNG ready for shipping. These two units will have the capacity to produce 14 million tonnes of LNG per year. There is the possibility of expanding the facility to include up to four processing units in the future.
Kitimat was chosen as the ideal location for the facility due to the easy access to abundant, low-cost natural gas from British Columbia’s vast resources. The location also benefits from a relatively short shipping distance to north Asia, one of the fastest growing gas markets in the world. The shipping route is approximately 50% shorter than from the US Gulf of Mexico and avoids the Panama Canal. The project has strong support from the local community, including indigenous First Nations, as well as from the local government. The project partners are also working to ensure that sustainable development is considered in every aspect of the project. For example, LNG Canada has been designed to achieve the lowest carbon intensity of any LNG project in operation today, aided by the partial use of hydropower.
The first phase of the project includes a $6.2-billion Coastal GasLink Pipeline through northern British Columbia, which will be built and operated by TC Energy (formerly TransCanada Corporation]]). Coastal GasLink will be a 670-kilometre (420 mile) gas pipeline with an initial capacity of about 2.1 billion cubic feet per day (Bcf/day) with the potential for expansion of up to approximately 5 Bcf/day. Construction activities are expected to begin in early 2019 with a planned in-service date in 2023. The pipeline project is backed by 25-year transportation service agreements between TC Energy and the LNG Canada partners.
The second phase is the construction of an $18-billion gas liquefaction and storage plant in the port of Kitimat, B.C., with two liquefaction 'trains' where the natural gas will be cooled to reach its liquid state, then be stored waiting for ships to transport it to Asian markets. A new terminal for LNG carrier ships will be built at the port of Kitimat, B.C., connected to the LNG Canada liquefaction and storage plant. LNG carrier ships will sail up and down the Douglas Channel, to and from the port of Kitimat, to load LNG and sail to overseas destinations, mainly in Asia. Such ships may be owned and operated by some of the LNG Canada partners, or by their LNG purchasing clients, or they may be time-chartered from specialized independent ship owners and operators of such specialized ships. A potential controversy in connection with this large construction project is the level of customs duties that will be applied by Canada on any import of foreign manufactured steel modules, especially from China.
Fluor and JGC won a lump sum $14bn engineering, procurement and construction (EPC) contract for the LNG Canada export facility in April 2018. Fluor’s share of the contract is $8.4bn.
Boskalis has been awarded a €100m ($115m) dredging contract for preparing the site. BAM International, along with JJM Construction and Manson Construction, was awarded a contract worth €95m ($109m) for the construction of the wharf for the marine terminal facility of LNG Canada, in October 2017.
Ledcor-Haisla Limited Partnership was awarded the contract for site preparation for the LNG Canada export facility, in March 2016. Bear Creek Contracting and JHW Construction have been contracted for civil works for the project, whereas ERM Consultants Canada was contracted for performing an impact assessment of the project. A consortium of Chiyoda, AMEC Foster Wheeler, Saipem, and WorleyParsons was awarded the FEED contract for the LNG Canada export facility, in May 2014.
TransCanada was selected in July 2012 to design, build, own, and operate the Coastal GasLink pipeline for supplying natural gas to the LNG Canada terminal.
The LNG Canada project is approved for construction. Key features of our proposed facility include:
LNG Processing Units: Natural gas will enter the processing units, or ‘trains’ – where carbon dioxide, water, condensate, sulphur and any other impurities will be separated out. The gas will then be chilled to approximately -162°C and turned into LNG. Condensates will be stored and railed out to market.
Storage Tanks: LNG will be piped to storage tanks until it is loaded onto LNG carriers at the wharf.
LNG Loading Lines: Two LNG loading lines will transfer LNG from the storage tanks to the wharf and the LNG carrier. They will be insulated to conserve energy and to keep the LNG in its liquid form.
Marine Terminal: An existing wharf will be redesigned to accommodate up to two LNG carriers at a time. Every LNG carrier will be assisted at the terminal by up to three tugboats – tugs will maneuver alongside the LNG carrier, positioning it at a very low speed until the LNG carrier is secured at the berth.
Rail Yard: The rail yard inside the facility will be connected into an existing rail system, which will be used to load condensate, a petroleum liquid that is one of the natural by-products of turning natural gas into LNG. The condensate will be stored temporarily in tanks on the site and then transported off-site by rail car for sale to customers.
Water Treatment Facility: The facility will draw water from the Kitimat River for use in process cooling, drinking and other purposes. Water taken from the river will be treated as needed prior to use. Water will be reused in a closed loop system to reduce water loss. Most of the water used by the cooling system will evaporate during use. Water that does not evaporate will be treated, along with any other facility wastewater, in an on-site wastewater treatment facility before releasing it into Kitimat Arm.
Flare Stacks: Two flare stacks – one that is approximately 60 metres tall and a second that is approximately 125 metres tall – will act as safety devices, a common feature in all LNG facilities. When the facility is operating normally, residents can expect to see a relatively small, clean burning flame (essentially, a pilot light) at the top of the stacks. The size of this pilot light will be approximately three feet in height, and will likely not be visible during the day.
Workforce accommodation: To limit the impact of a large influx of people on the Kitimat community, LNG Canada is building Cedar Valley Lodge – a workforce accommodation centre adjacent to work site, which can house up to 4500 people in single room accommodation. Designed with the worker in mind, people working on the project will be provided bus transportation to site, to reduce the number of automobiles on the road and address road safety issues. For residents of Terrace that work on the construction of the facility, shuttle bus transportation will be provided